Llamasoft: delivering efficient time-to-value services
Could you tell me a littl...
Madhav Durbha, Group Vice President of Industry Strategy at LLamasoft, speaks with us about what sets the organisation apart.
Could you tell me a little bit about your company and your role at the company?
LLamasoft delivers the science behind supply chain’s biggest decisions. Over 750 of the world’s most innovative companies across industries rely on our algorithmic intelligence to answer complex supply chain questions. We offer productised applications and innovative solutions to accelerate adoption of AI with deep expertise in machine learning, optimisation, simulation and advanced analytics capabilities to improve decision making. Our technology helps business leaders design operational strategies to achieve profitability and growth goals. The company creates a true end-to-end view of global supply chains to enable decisions along strategic, tactical and operational time horizons.
What are the current trends within your industry?
Supply chains across the board are undergoing a massive shift. Rising customer expectations, increased nationalistic agendas resulting in uncertainty in tariffs, connected consumers empowered by information, increasing focus on sustainability and the explosion of data are just a few factors that make operating supply chains increasingly complex.
Retailers are increasingly focused on last mile delivery. B2B manufacturers are embedding smart technology into their products to monitor the usage of the product and run remote diagnostics to deploy proactive maintenance. Such connected products are also giving rise to subscription models in the B2B space. CPG companies are also looking for direct to consumer connections through increased use of subscription models.
From a technology perspective, we are seeing high levels of interest in understanding the use of AI in supply chain. Beyond AI, given the advances in cloud computing, building end-to-end digital models of the supply chains is now a reality. Such ‘digital twins’ are enabling organisations to perform complex what-if analyses and assess the best outcomes. As an example, in light of the recent trade wars, we have customers who are using their supply chain digital twins to make complex trade-offs between taxes and tariffs, shipping costs, inventory carrying costs, customer service levels and so on to make decisions around sourcing changes.
What makes your company competitive?
Our biggest differentiation is the ability to solve the most difficult supply chain problems and enable highly interconnected decisions. While traditional supply chain decisioning systems have functionally optimised the ‘source-make-deliver’ links, they have not done enough to drive decisions connecting these links. LLamasoft enables decisions cutting across functions such as optimising supply chain networks, flow path optimisation or cost-to-serve based optimisation.
Very fast time-to-value is another critical differentiator. Our customers can uncover opportunities worth millions of dollars with implementation timelines as short as six to eight weeks.
At the core of our offering is a very comprehensive data model that spans across a variety of functions from sourcing to manufacturing to distribution to points of consumption. Populating this data model enables a supply chain digital twin.
Layering on top of the digital twin is a rich library of algorithms spanning optimisation, heuristics, AI/ML and simulation. These algorithms are the ‘brains’ behind the decisions enabled by our platform.
We also provide a visually intuitive environment where users can build supply chain models. Thanks to our cloud-enabled decisioning platform, we can now deploy these models through apps developed on our platform at enterprise scale without having to write code.
What innovations has your company been developing during 2019?
We invest 25% of our revenues into R&D. We employ over 200 data science/machine learning experts -many of them with Masters and PhDs from reputed universities. Here are some examples of our continued innovation:
Increasing the speed at which supply chain questions of varying degrees of complexity can be answered. This is through continued investment and collaboration with some of our largest customers to drive the development of our digital decisioning platform.
Expanding the use cases feasible through our technology. This year we went through a concerted effort of expanding the use cases our customers take advantage of and now enable over 25 use cases that span across strategic to tactical and operational decisions.
We made major functional enhancements to our core algorithmic engines. One example of that is the recent capability we launched around taxes and duties analytics. This helps organisations to fully evaluate new sourcing, procurement and distribution strategies to minimise the impact of taxes and duties on their total cost to serve customers around the world. Companies such as Shell, with highly global supply chains, are taking advantage of such capabilities to model sourcing scenarios in light of changes to trade agreements.
Powerful visualisations built to allow users to surface the challenges and opportunities hidden in their supply chains through descriptive, diagnostic, predictive and prescriptive analytics.
What are your predictions for the industry in 2020?
Here are some predictions for 2020 for the supply chain industry.
Regionalisation of supply chains will continue to accelerate due to ongoing trade wars, Brexit and so on. However, smarter companies are looking at this as an opportunity. As supply chains shorten, responsiveness and agility will improve. We will see increased shift in sourcing strategies with this regionalisation.
The race with speed of delivery will continue with increased B2C shipments increasingly tilting towards next-day and same day delivery. This will pressure retailers and logistics providers to look for efficiencies in supply chains.
Rise of digital nationalism and Splinternet of Things: With the race towards 5G dominance and increased concerns around governments’ desire to protect their citizens’ data, the internet will also start getting increasingly fragmented and partitioned due to increased government oversight. Regulation such as GDPR and newer laws being adopted by India to protect the data of its citizens will have massive implications for companies with global aspirations and accordingly their supply chains.
We will see increased operationalisation of Machine Learning applications: Application of AI/ML will progress beyond science experiment and start getting deployed across larger user bases as part of their daily decision making.
Staffing for appropriate skills will be a challenge for organisations. There will be increased need for skills required at two ends of the jobs spectrum. At one end will be jobs that require extreme physical dexterity such as in warehouses and last mile delivery. At the other end will be those requiring high mental dexterity such as those with skills in areas such as AI/ML etc.
Is there any exciting news you’d like to share with our readers at Supply Chain Digital?
In fact, 2019 was such an exciting year for us that there are multiple items I’d like to share.
We opened our new, state of the art EMEA headquarters, significantly expanding our investments in the region.
We acquired Opex Analytics, a leading AI firm turning us into an AI powerhouse. This also significantly expanded our global footprint giving us access to the talent base in India given Opex’s presence there.
We announced our partnership with JD Logistics, a huge strategic win for us that significantly increases our penetration into the massive China market.
We won the prestigious General Motors’ Supplier of the year award for the second year in a row.
We continue to accelerate our growth. In the first half of this year alone, our software subscription revenues grew by over 30% year-over-year and we added 33 new customers.
We continue to expand our partner ecosystem and several of our partners now have the competencies to build and deliver apps.
For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”